The London-based company said net income fell to $46 million from $1.29 billion in the third quarter of 2014. So-called underlying replacement cost profit, BP's preferred measure of performance, fell 40 percent to $1.82 billion.
BP also said it plans to cut costs by $6 billion through 2017 — $3 billion more than already achieved — forecasting oil prices at around $60 a barrel by that time. Brent crude, the benchmark for North Sea oil, averaged $50.26 a barrel in the third quarter, down 51 percent from a year earlier.
The company also expects to sell as much as $5 billion of assets next year.
"BP has successfully adapted to changing circumstances many times in its history and, in a hard time for the entire industry, I believe we will once again successfully take on today's challenges," Chief Executive Officer Bob Dudley said in a statement.
Oil prices dropped to a six-year low in August and haven't rebounded much. That is prompting oil companies to cut production, with the International Energy Agency forecasting declines in the United States, North Sea and Russia next year.
BP is trying to protect dividends as it charts a course through to an eventual price recovery.
Dudley said the cost savings announced Tuesday underpin "our strong priority of sustaining our dividend and then growing free cash flow and shareholder distributions over the long term."
Some analysts believe BP's cost-cutting efforts are beginning to pay off. Three of 12 analysts tracked by Hargreaves Lansdown, a London-based stockbroker, upgraded their recommendations on the company last month.
BP took a further charge for $426 million for costs related to the Deepwater Horizon spill, pushing total charges to $55 billion. In July, the U.S. Justice Department and five states agreed to a final settlement of environmental damage claims arising from the 2010 oil spill in the Gulf of Mexico.
Once approved by a judge, the deal would resolve all civil claims against BP and end five years of legal fighting over a 134 million-gallon spill that affected 1,300 miles of shoreline. BP would also commit to a massive cleanup project in the Gulf Coast area aimed at restoring wildlife, habitat and water quality.